OMCs Part 5: Sinking (Building Investment) Fund
Under the Multi-Unit Development Act, 2011 the OMC’s (Owner Management Companies) are required to set up a Sinking (Building Investment) Fund. This fund is used to cover the cost of non-recurring expenditure such as refurbishment or improvements. Section 19 of the MUD Act sets out clearly how the sinking fund should be administered, it also outlines what constitutes expenditure of a non-recurring nature. The Act states that the fund should be kept in a separate account that clearly distinguishes it from the general funds of the company. Our advice would be that all Sinking fund monies should be kept in a separate bank account clearly named Sinking Fund Account. We would also advise that directors keep minutes detailing any amounts used from the SF account, the purpose of same and approval by members. Directors of OMC’s should ensure that the company complies with the requirements of the Act at all times.